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on Labor Markets - Supply, Demand, and Wages |
| By: | Lukas B. Freund; Lukas F. Mann |
| Abstract: | Who will gain and who will lose as AI automates tasks? While much of the discourse focuses on job displacement, we show that job transformation—a shift in the task content of jobs—creates large and heterogeneous earnings effects. We develop a quantitative, task-based model where occupations bundle multiple tasks and workers possessing heterogeneous portfolios of task-specific skills select into occupations by comparative advantage. Automation shifts the relative importance of tasks within each occupation, inducing wage effects that we characterize analytically. To quantify these effects, we measure the task content of jobs using natural language processing, estimate the distribution of task-specific skills, and exploit mappings to prominent automation exposure measures to identify task-specific automation shocks. We apply the framework to analyze automation by large language models (LLMs). Within highly exposed occupations, like office and administrative roles, workers specialized in information-processing tasks leave and suffer wage losses. By contrast, those specialized in customer-facing and coordination tasks stay and experience wage gains as work rebalances toward their strengths. Our findings challenge the common assumption that automation exposure equates to wage losses. |
| Keywords: | AI, labor markets, inequality, skills, technological change |
| JEL: | J01 E00 J23 J24 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12072 |
| By: | Axana Dalle; Toon Wybo; Stijn Baert; Dieter Verhaest (-) |
| Abstract: | In many countries, age discrimination appears to be driven by negative perceptions that recruiters stereotypically hold about older candidates’ technological skills, trainability, and flexibility. Based on multiple theories, we hypothesise that training programmes might mitigate these ageist stereotypes and thereby improve these candidates’ recruitability. We test this pathway out of age discrimination by designing a vignette experiment in which professional recruiters assess the recruitability and human capital perceptions of fictitious candidates varying in age and (willingness for) participation in apprenticeship training at older ages. Our results demonstrate that candidates indicating their (willingness for) participation in such training to obtain relevant work experience are more likely to be recruited than candidates without such experience, regardless of their age. Moreover, recent participation also mitigates age discrimination, as the premium it yields is higher for candidates aged 55 and older. Nevertheless, no robust differences in perceptions are observed. |
| Keywords: | Hiring discrimination; Older workers; Labour market programmes; Apprenticeships; Signalling; Scenario experiment |
| JEL: | J14 J24 J71 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1119 |
| By: | Hendriks, Martijn; Cnossen, Femke |
| Abstract: | Meaningful work plays a central role in many people's lives, and the topic attracts interest across a range of social science disciplines. What is the economists' view on meaningful work? This chapter presents a scoping review on the economics of meaningful work. We identified 43 relevant English-language articles in top-quartile economics journals through a systematic search in EconLit and citation tracking. We synthesize how these studies conceptualize, perceive, and operationalize meaningful work, along with their insights into individuals' preferences for meaningful work, how meaningful people consider their work to be, the antecedents and outcomes of meaningful work, and the broader conclusions, implications, and recommendations. |
| Keywords: | Purpose, bullshit jobs, useful job, meaning at work, task significance, literature review |
| JEL: | J22 J24 J28 J31 J81 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1657 |
| By: | Mark Bils; Bariş Kaymak; Kai-Jie Wu |
| Abstract: | We provide a number of insights into the nature and consequences of monopsony power through the lens of comparative advantage, where employers’ power in wage setting stems from match-specific rents. Chief among them is that employers will apply larger wage markdowns to workers with greater comparative advantage at their firm. This leads to stronger monopsony power over more productive workers, provided the workers’ comparative advantage aligns with their absolute advantage. Using Brazilian administrative data, we confirm this prediction: monopsony disproportionately affects high-wage workers within firms and workers at high-paying firms. The model, calibrated to our estimates for Brazil, predicts that minimum wages increase both wages and formal employment for more productive workers while pushing less productive workers out of formal employment. |
| JEL: | E0 J0 J42 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34165 |
| By: | Nieddu, Marco (University of Cagliari); Nistico, Roberto (University of Naples Federico II); Pandolfi, Lorenzo (University of Naples II) |
| Abstract: | This paper examines how publication-based tenure-track systems affect the careers of Ph.D. graduates in Economics. We leverage a 2010 reform in Italy that replaced open-ended assistant professor (AP) positions with fixed-term contracts and introduced publication minimum requirements for career advancement. Using survey and administrative data, along with a Difference-in-Differences Event-Study approach comparing Economics to less academicallyoriented fields, we find that the reform significantly reduced the likelihood of Economics Ph.D. graduates entering academia in Italy, while increasing transitions to academic careers abroad or to public and private sector jobs. Talented graduates were disproportionately affected, revealing negative selection into Italian academia following the removal of permanent AP positions. Despite these trends, tenure-track hires tend to publish more in high-ranking journals, suggesting that the reform’s incentive effects may partly mitigate its negative selection effects. |
| Keywords: | publications, fertility, academic careers, tenure |
| JEL: | I23 J13 J24 J71 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18083 |
| By: | Nikolaos Askitas |
| Abstract: | Generative AI (GenAI) and Large Language Models (LLMs) are moving into domains once seen as uniquely human—reasoning, synthesis, abstraction, and rhetoric. Addressed to labor economists and informed readers, this paper clarifies what is truly new about LLMs, what is not, and why it matters. Using an analogy to autoregressive models from economics, we explain their stochastic nature, whose fluency is often mistaken for agency. We situate LLMs in the longer history of human–machine outsourcing, from digestion to cognition, and examine disruptive effects on white-collar labor, institutions, and epistemic norms. Risks emerge when synthetic content becomes both product and input, creating feedback loops that erode originality and reliability. Grounding the discussion in conceptual clarity over hype, we argue that while GenAI may substitute for some labor, statistical limits will preserve a key role for human judgment. The question is not only how these tools are used, but which tasks we relinquish and how we reallocate expertise in a new division of cognitive labor. |
| Keywords: | generative artificial intelligence, large language models, autoregressive models, labor economics, technological change, automation and outsourcing, human–machine collaboration, knowledge work, epistemic norms, digital transformation |
| JEL: | J24 O33 O31 J22 D83 L86 J44 O38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12070 |
| By: | Michael Ewens; Xavier Giroud |
| Abstract: | We introduce a novel measure of corporate hierarchies for over 2, 500 U.S. public firms. This measure is obtained from online resumes of 16 million employees and a network estimation technique that allows us to identify hierarchical layers. Equipped with this measure, we document several facts about corporate hierarchies. Firms have on average ten hierarchical layers and a pyramidal organizational structure. More hierarchical firms have a more educated workforce, higher internal promotion rates, and longer employee tenure. Their operating performance is higher, but they face higher administrative costs. They are more active acquirers and produce more patents, but not higher-quality patents. They exhibit lower stock return volatility and more stable cash flows. We also examine how companies adjust their hierarchies in response to demand and knowledge shocks. We find that biotech companies increased their number of layers following the Covid-19 pandemic, while companies flattened their hierarchies following the adoption of artificial intelligence (AI) technologies. These findings are consistent with the theoretical predictions of existing models of corporate hierarchies. |
| JEL: | D21 D23 G3 J24 L22 M12 M51 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34162 |
| By: | Davide Luparello |
| Abstract: | Are temporary workers subject to different wage markdowns than permanent workers? This paper examines productivity, output markups, and wage markdowns in India's automotive sector during 2000--2020. I develop a model integrating CES production, nested logit labor supply, and differentiated labor market conduct: Nash-Bertrand wage setting for temporary workers versus Nash bargaining for unionized permanent workers. Results reveal declining output markups as marginal costs outpace prices through productivity deceleration. Rising labor-augmenting productivity cannot offset declining Hicks-neutral productivity, reducing overall TFP. Labor market power substantially compresses worker compensation: wage markdowns persist at 40% for temporary workers and 10% for permanent workers. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.08222 |
| By: | Bradley Setzler |
| Abstract: | Existing structural analyses of the harmful effects of market consolidation focus on either product or labor markets in isolation, ignoring that product market competitors often compete for workers as well. This paper develops a unified framework for merger evaluation, finding that firms' simultaneous exercise of oligopoly power in the product market and oligopsony power in the labor market amplifies the harm from mergers to both consumers and workers. The model also demonstrates how merger-induced gains in labor market power incentivize firms to reduce product quality, highlighting an additional channel for consumer harm. The model's predictions are tested and quantified in the context of the recent consolidation of the US hospital industry. Linking panel data from several sources on all US hospitals from 1996-2022, a difference-in-differences design is estimated for nearly 150 high-concentration within-market mergers. Hospital mergers significantly reduce patient volume, increase prices, reduce employment, lower wages, and deteriorate quality of care, resulting in higher patient mortality. After recovering the structural parameters, the estimated model replicates observed merger impacts. Counterfactual exercises reveal that ignoring increased labor (product) concentration would lead one to under-predict the harm of mergers to consumers (workers). |
| JEL: | I11 J42 L41 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34180 |
| By: | Thimo De Schouwer; Elisabeth Gsottbauer; Iris Kesternich; Heiner Schumacher |
| Abstract: | Work meaning can be an important driver of labor supply. Since, by definition, work meaning is associated with benefits for others, it also has an important fairness dimension. In a theoretical model, we show that workers’ willingness to pay for work meaning can be positive or negative, depending on the relative strength of fairness concerns and meaning preferences. To examine the importance of these behavioral motives for labor supply, we conduct a survey experiment with representative samples from the Netherlands and Germany in which we vary within-subject the benefits that a job creates for others. We find that only a minority of workers are actually willing to sacrifice wage for work meaning. The average willingness to pay for work meaning is positive, but substantially lower than the willingness to pay for job flexibility. There is a strong negative relationship between fairness concerns and willingness to pay for work meaning. Thus, individuals who prioritize fairness are less likely to accept lower wages for meaningful work. |
| Keywords: | work meaning, labor supply, fairness preferences |
| JEL: | C83 C90 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12068 |
| By: | Naveen Srinivasan (Madras School of Economics, Chennai, Tamil Nadu, India, 600025); Poorna Narayanan (Madras School of Economics, Chennai, Tamil Nadu, India, 600025); Megana Prabha (London School of Economics and Political Science, Houghton Street, London, WC2A 2AE, United Kingdom); Hariharasudhan Selvaraj ((corresponding author) Madras School of Economics, Chennai, Tamil Nadu, India, 600025) |
| Abstract: | We introduce credit constraints into a standard model of endogenous growth. In the presence of credit constraints, firms in poor countries face higher borrowing costs which in turn negatively affects capital accumulation and labor productivity in the final-goods producing sector. Furthermore, lower capital intensity of production makes R&D activity less profitable. As a result, both demand for skilled labor and return to skill are lower in poor countries. Domestic financial frictions may therefore be the key to understanding the persistent wage differentials in favor of rich countries and international migration patterns we observe. |
| Keywords: | Skilled Wages; Migration; Credit Constraints; R&D; Endogenous Growth |
| JEL: | F2 D24 D42 J23 J24 J62 O40 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2025-289 |
| By: | Cristiano Cantore; Haroon Mumtaz; Filippo Ferroni; Angeliki Theophilopoulou |
| Abstract: | We study the interaction between monetary policy and labor supply decisions at the household level. We uncover evidence of heterogeneous responses and a strong counter-cyclicality of hours worked in the left tail of the income distribution following a monetary policy shock in the U.S. Specifically, while aggregate hours and labor earnings decline after a monetary tightening, individuals at the bottom of the income distribution increase their hours worked. Moreover, this positive labor supply response is quantitatively significant, substantially dampening the decline in aggregate hours worked. We show that the empirical patterns are consistent with a standard one-asset HANK model featuring endogenous labor supply. The model reveals that strong income effects at the bottom of the distribution can account for the observed countercyclical labor responses, highlighting how labor supply adjustments act as an additional margin through which households smooth consumption. Comparing this specification to a model with a homogeneous labor supply, we find that labor supply heterogeneity reduces the aggregate MPC and attenuates the transmission of monetary policy through aggregate demand. As a result, the output cost of disinflation is lower in economies where poorer households can flexibly adjust their labor effort, easing the trade-off faced by the central bank. |
| JEL: | E52 E32 C10 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1210 |
| By: | Matteo Escud\'e; Paula Onuchic; Ludvig Sinander; Quitz\'e Valenzuela-Stookey |
| Abstract: | We study the interplay of information and prior (mis)perceptions in a Phelps-Aigner-Cain-type model of statistical discrimination in the labor market. We decompose the effect on average pay of an increase in how informative observables are about workers' skill into a non-negative instrumental component, reflecting increased surplus due to better matching of workers with tasks, and a perception-correcting component capturing how extra information diminishes the importance of prior misperceptions about the distribution of skills in the worker population. We sign the perception-correcting term: it is non-negative (non-positive) if the population was ex-ante under-perceived (over-perceived). We then consider the implications for pay gaps between equally-skilled populations that differ in information, perceptions, or both, and identify conditions under which improving information narrows pay gaps. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.20053 |
| By: | Joshua S. Gans |
| Abstract: | This paper develops a unified model of the cognitive division of labour in a knowledge economy. Building on recent frameworks for knowledge creation and decision making under uncertainty, it distinguishes between specialists, who engage in costly “on the spot” reasoning to generate tacit knowledge around a focal point, and generalists, who search for and interpolate existing knowledge but deliver answers subject to error. The model characterises how these two types of workers should be allocated across a continuum of questions, given the location of codified knowledge points and the distribution of problems. It shows that optimal task assignment depends on the cognitive process through which information is processed rather than on skill endowments or task complexity. When specialists operate around both knowledge points, their allocation is shaped by their absolute advantage over generalists, leading to non‐contiguous specialist domains interspersed with generalist regions. When specialists cluster around a single point, a natural boundary emerges between specialist and generalist domains that shifts but persists despite changes in question distribution. Extending the analysis to a two‐period setting, the paper identifies when specialists should sacrifice static efficiency to codify their tacit discoveries, creating bridges that allow generalists to operate more effectively in the future. These results provide a formal microfoundation for Babbage’s insights into the division of cognitive labour and offer predictions about how knowledge work responds to changes in the knowledge environment, the distribution of questions, and the patience of capital. |
| JEL: | D83 J24 L23 L25 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34145 |
| By: | Alessio Tomelleri; Giorgio Cutuli; Andrea Signoretti |
| Abstract: | In the last decades, socio-economic literature has paid considerable attention to the distribution of costs and benefits of technological introduction and ICT diffusion for different segments of the workforce, mainly across distinct occupational or educational groups. This study explores how wage returns to ICT use differ between temporary and permanent workers focusing on the role of trade unions in mitigating this contractual divide. Using recent European microdata from the ESJ2 survey (CEDEFOP 2022), we examine whether union membership enhances wage outcomes for temporary workers using digital skills, and how this effect varies depending on national patterns of union representation. By combining individual-level information with country-level indicators of trade union density across contractual types, we assess how micro and macro level dynamics shape wage parity in ICT returns. Overall, our findings reveal a clear penalty for non-unionised temporary workers. The protective role of trade union membership is nonetheless significant only in national contexts characterized by similar level of trade union density across contractual groups. These results underscore both the conditionalities and potentials of industrial relations in fostering inclusive labour markets amid technological change. |
| Keywords: | ICT skills, wage premiums, European labour markets, temporary contracts, trade unions |
| JEL: | J2 E24 O30 J50 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:fbk:wpaper:2025-04 |
| By: | Georgy Lukyanov; Konstantin Popov; Shubh Lashkery |
| Abstract: | We analyze a dynamic labor market in which a worker with career concerns chooses each period between (i) self-employment that makes output publicly observable and (ii) employment at a firm that pays a flat wage but keeps individual performance hidden from outside observers. Output is binary and the worker is risk averse. The worker values future opportunities through a reputation for talent; firms may be benchmark (myopic) (ignoring the informational content of an application) or equilibrium (updating beliefs from the very act of applying). Three forces shape equilibrium: an insurance - information trade-off, selection by reputation, and inference from application decisions. We show that (i) an absorbing employment region exists in which low-reputation workers strictly prefer the firm's insurance and optimally cease producing public information; (ii) sufficiently strong reputation triggers self-employment in order to generate public signals and preserve future outside options; and (iii) with equilibrium firms, application choices act as signals that shift hiring thresholds and wages even when in-firm performance remains opaque. Comparative statics deliver sharp, testable predictions for the prevalence of self-employment, the cyclicality of switching, and wage dynamics across markets with different degrees of performance transparency. The framework links classic career-concerns models to contemporary environments in which some tasks generate portable, public histories while firm tasks remain unobserved by the outside market (e.g., open-source contributions, freelancing platforms, or sales roles with standardized public metrics). Our results rationalize recent empirical findings on the value of public performance records and illuminate when opacity inside firms dampens or amplifies reputational incentives. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.01265 |
| By: | Lavy, Victor (University of Warwick, Hebrew University, and NBER); Rachkovski, Genia (Tel Aviv University); Yoresh, Omry (London School of Economics) |
| Abstract: | Literature has shown that air pollution can have short- and long-term adverse effects on physiological and cognitive performance. In this study, we estimate the effect of increased pollution levels on the likelihood of accidents in construction sites, a significant factor related to productivity losses in the labor market. Using data from all construction sites and pollution monitoring stations in Israel, we find a strong and significant causal effect of nitrogen dioxide (NO2), one of the primary air pollutants, on construction site accidents. We find that a 10-ppb increase in NO2 levels increases the likelihood of an accident by as much as 25 percent. Importantly, our findings suggest that these effects are non-linear. While moderate pollution levels, according to EPA standards, compared to clean air levels, increase the likelihood of accidents by 138 percent, unhealthy levels increase it by 377 percent. We present a mechanism where the effect of pollution is exacerbated in conditions with high cognitive strain or reduced awareness. Finally, we perform a cost-benefit analysis, supported by a nonparametric estimation calculating the implied number of accidents due to NO2 exposure, and examining a potential welfare-improving policy to subsidize the closure of construction sites on highly polluted days. |
| Keywords: | Workplace Accidents, Labor Productivity, Air Pollution, Government Policy JEL Classification: |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:770 |
| By: | Bagger, Jesper (University of Edinburgh); Fontaine, Francois (Paris School of Economics); Galenianos, Manolis (University of London); Trapeznikova, Ija (Royal Holloway, University of London) |
| Abstract: | This paper examines the relationship between output fluctuations and firms’ recruitment efforts using Danish data that link online job ads with high-frequency firm-level revenue and value-added. While overall output growth is weakly correlated with advertisement rates, decomposing output into permanent and transitory components reveals a strong link between persistent shocks and recruitment effort. A one standard deviation permanent shock raises advertisement rates by 10-16% of a standard deviation, whereas transitory shocks show no significant effect. These results highlight the importance of shock persistence in labor demand and offer empirical support for dynamic search-and-matching models of the labor market. |
| Keywords: | value-added growth, revenue growth, output growth, online job advertisements, vacancies, permanent and transitory shocks |
| JEL: | J23 J63 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18068 |
| By: | Fabio Milani |
| Abstract: | This paper estimates a New Keynesian model with heterogeneous agents to study the interactions among monetary policy, macroeconomic shocks, and the distribution of income between capital and labor. The model assumes two types of households: workers, who supply labor to firms and receive wage income, and capitalists, who own the firms and enjoy the corresponding profits. There are nominal rigidities in both the goods and labor markets. The structural model is estimated using Bayesian methods to match U.S. data on consumption, corporate profits, wages, inflation, and nominal interest rates, on a sample spanning more than six decades. The empirical results show that contractionary monetary policy and inflationary price-markup shocks lead to increases in inequality. Negative wage markup shocks, which proxy for declining workers' bargaining power, are major drivers of peaks in inequality over the sample; together with price markup shocks, they also account for a significant share of the changes in inequality after COVID. |
| Keywords: | Heterogeneous-Agent New Keynesian model, income distribution between capital and labor, monetary policy and inequality, inflation and inequality. |
| JEL: | E25 E31 E32 E52 E58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12065 |
| By: | Ko Adachi (Bank of Japan); Naoya Kato (Bank of Japan) |
| Abstract: | This paper empirically examines the second-round effect of raw material price increases using a DSGE model. Specifically, it explores how price increases driven by rising raw material costs spill over into wages, which then feed back into prices. The analysis focuses on Japan and Europe, which share similar structures in terms of raw material inputs. The results show that the first-round effect, which captures the pass-through of rising raw material costs to prices, is slower in Japan than in Europe. On the other hand, the second-round effect through wages is gradual but persistent in both Japan and Europe. Furthermore, during the period of high inflation since 2020, the first-round effect of higher raw material costs was the main driver of inflation in both Japan and Europe, while the second-round effect contributed to the persistence of inflation. The paper also suggests that the recent changes in wage rigidity in Japan may have strengthened the second-round effect. |
| Keywords: | Wages; Prices; Second-Round Effects; DSGE Model |
| JEL: | E17 E31 J30 |
| Date: | 2025–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:boj:bojwps:wp25e10 |
| By: | Nikolaos Askitas |
| Abstract: | We examine the uptake and measurable effects of GPT-assisted writing in economics working paper abstracts. Focusing on the IZA discussion paper series, we detect a significant stylistic shift following the public release of ChatGPT-3.5 in March 2023. This shift appears in core textual metrics—including mean word length, type-token ratio, and readability—and reflects growing alignment with machine-generated writing. While the release of ChatGPT constitutes an exogenous technological shock, adoption is endogenous: authors choose whether to incorporate AI assistance. To capture and estimate the magnitude of this behavioral response, we combine stylometric analysis, machine learning classification, and prompt-based similarity testing. Event-study regressions with fixed effects and placebo checks confirm that the observed shift is abrupt, persistent, and not attributable to pre-existing trends. A similarity experiment using OpenAI’s API shows that post-ChatGPT abstracts more closely resemble their GPT-optimised counterparts than do pre-ChatGPT texts. A classifier trained on these variants achieves 97% accuracy and increasingly flags post-March 2023 abstracts as GPT-like. Rather than indicating wholesale substitution, our findings suggest selective human–AI augmentation in professional writing. The framework introduced here generalises to other settings where writing plays a central role—including resumes, job descriptions, legal briefs, research proposals, and software documentation. |
| Keywords: | GPT adoption, academic writing, text analysis, natural language processing (NLP), machine learning, event study, linguistic metrics, AI-assisted writing, diffusion of technology |
| JEL: | C55 C88 O33 C81 L86 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12069 |
| By: | Nicholas Gray (Reserve Bank of Australia); Finn Lattimore (Reserve Bank of Australia); Kate McLoughlin (Reserve Bank of Australia); Callan Windsor (Reserve Bank of Australia) |
| Abstract: | In a world of high policy uncertainty, central banks are relying more on soft information sources to complement traditional economic statistics and model-based forecasts. One valuable source of soft information comes from intelligence gathered through central bank liaison programs – structured programs in which central bank staff regularly talk with firms to gather insights. This paper introduces a new text analytics and retrieval tool that efficiently processes, organises, and analyses liaison intelligence gathered from firms using modern natural language processing techniques. The textual dataset spans around 25 years, integrates new information as soon as it becomes available, and covers a wide range of business sizes and industries. The tool uses both traditional text analysis techniques and powerful language models to provide analysts and researchers with three key capabilities: (1) quickly querying the entire history of business liaison meeting notes; (2) zooming in on particular topics to examine their frequency (topic exposure) and analysing the associated tone and uncertainty of the discussion; and (3) extracting precise numerical values from the text, such as firms' reported figures for wages and prices growth. We demonstrate how these capabilities are useful for assessing economic conditions by generating text-based indicators of wages growth and incorporating them into a nowcasting model. We find that adding these text-based features to current best-in-class predictive models, combined with the use of machine learning methods designed to handle many predictors, significantly improves the performance of nowcasts for wages growth. Predictive gains are driven by a small number of features, indicating a sparse signal in contrast to other predictive problems in macroeconomics, where the signal is typically dense. |
| Keywords: | central banking; macroeconomic policy; wages and labour costs; machine learning; econometric modelling; information retrieval systems; firm behaviour |
| JEL: | C5 C8 D2 E5 E6 J3 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:rba:rbardp:rdp2025-06 |
| By: | Sonna Vikhil ((corresponding author) Madras School of Economics, Chennai, Tamil Nadu, India, 600025); K.S. Kavi Kumar (Madras School of Economics, Chennai, Tamil Nadu, India, 600025) |
| Abstract: | While many developing countries, including India, increasingly started using unconditional cash transfers in agriculture (UCTAs) to improve welfare of people, the effectiveness of such policies are still being evaluated. The impact of UCTAs can be evaluated from multiple perspectives, including expenditure on inputs, allocation of time across different activities by the farmers etc. Using data from the 2019 and 2024 NSSO’s Time Use Survey, this study aims to investigate the effects of a cash transfer program – Rythu Bandhu Scheme - introduced in Telangana on the time use patterns of rural agricultural households.The time allocation in a day has been classified into activities corresponding to four broad categories: System of National Accounts (SNA) (e.g., Employment and Production-related), Extended SNA (ESNA) (e.g., Unpaid domestic services and caregiving), Non-SNA (NSNA) (e.g., Learning, Socialization and Leisure etc), and Self-care (SC) (e.g., Eating, Sleeping etc). The program’s causal impacts are evaluated separately for both periods using a Seemingly Unrelated Regression (SURE) framework to address cross-equation residual correlation. Additionally, to address selection bias, Average Treatment effects on the Treated (ATT) has been estimated ignoring residual correlation. The study also employed Propensity Score Matching (PSM), to ensure a valid quasi-experimental design. The 2019 findings demonstrate an initial trend towards more engagement in SNA and SC activities, coupled with a contraction in time spent on ESNA and NSNA activities. This pattern indicates an immediate response to the cash transfer, possibly driven by short-term adjustments in labour supply and household well-being. The 2024 estimates, on the other hand, show time use pattern that is more sustained: households engage more time on NSNA and, to a lesser extent, ESNA activities while spending less time on SNA and SC. These shifts indicate a settling into a new equilibrium facilitated by assured income from the UCTAs, where households diversify their time usage beyond the market production and prioritise leisure, learning, and social activities |
| Keywords: | Cash Transfers; Agriculture; Time-Use Patterns |
| JEL: | D13 I38 J22 Q18 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2025-287 |
| By: | Never, Babette; Stöcker, Alexander; Tsinda, Aimé; Mujanama, Erick; Mugisha, Roger |
| Abstract: | Green, circular buildings and their construction are essential for climate change mitigation and resource efficiency. However, the impact of a systematic shift towards green, circular buildings on employment in Sub-Saharan Africa remains unclear. Rwanda, particularly Kigali, is a relevant case due to its high urbanisation rate, pressing housing needs and political commitment to greening the economy. Currently, we do not know what types of green jobs exist in Kigali's construction value chain or what potential they have for economic development. This paper addresses these questions using a sequential mixed-methods approach. We conducted 33 qualitative, semi-structured interviews with local experts and stakeholders. Based on these insights, we ran a survey with 546 firms across five construction value chain segments: planners/architects, material producers, material and equipment suppliers, construction/masonry firms, and firms installing energy, water, and wastewater technologies. Our analysis reveals four key findings: (1) a significant number of green jobs exist in the construction value chain, with varying degrees of greenness based on the number of environmentally-friendly practices performed (about are 5 per cent highly green and 58 per cent are partly green); (2) diverse green and circular practices are developing through both state support and grassroots initiatives; (3) greening is positively and significantly correlated with employment growth for highly green firms; and (4) greening is positively and significantly associated with improved job quality for all firms. For policy-makers, our results suggest that supporting firms in critical transition phases - those that have initiated greening but are not fully engaged - may enhance both job quantity and quality in the short to mid-term. Expanding green and circular, bio-based building practices across the construction sector requires a mix of interventions focused on cost competitiveness, skills and attitudes. |
| Keywords: | green jobs, green economy, green buildings, value chain, Sub-Saharan Africa |
| JEL: | J21 Q56 L74 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:324633 |